Southwest business model
- Thread starter nostradamus
- Start date
ramper_in_las
Senior
MSNBC doesn't have a clue - what a bunch of nimrods
This from the same guys that said that WN is primed for leveraged buyout. HMMMMM :down:
." The airline had similar figures for Philadelphia, where planes were "just more than half full"
But such growth has come with mixed results. The Post notes that overall passenger load is down from 71% to 69% so far this year, and that "Flights out of Dulles, where the carrier started service in October, were barely half full during the first two months of the year." The airline had similar figures for Philadelphia, where planes were "just more than half full" and at Denver, where its 66% rate was still "far short" of other carriers at DIA.
McAdoo says that because Southwest has enjoyed 34 straight profitable years investors are perhaps “lulled†into thinking management has the company in good hands. It has also distracted them from the dark numbers coming from the large markets like Chicago, Los Angeles, and Philadelphia. For example, the firm's Chicago to Los Angles lost $2 million in the last quarter, with seven daily roundtrips per day. In 2004 the firm had four round trips a day for that route, but still lost from $1 million to $2 million per-quarter.
KCFlyer
Veteran
Wouldn't you just #### if they filed bankruptcy (twice) to enable them to compete in an industry that would most likely be strong and vibrant had the bankruptcy courts not been liberal enough to let not one....not two...not three...but four...and one of those (the one you post in the most) has been thru bankruptcy a (merged) total of 3 times. Didja ever stop to think that had the free market run it's course, we might have a couple of fewer "major" airlines in business...but those that remained would have ended up stronger and more vibrant than anyone could have imagined, since they would have been competing against carriers that did little things like pay their creditors and reward their shareholders? Long Live Southwest and AA.." The airline had similar figures for Philadelphia, where planes were "just more than half full"
But such growth has come with mixed results. The Post notes that overall passenger load is down from 71% to 69% so far this year, and that "Flights out of Dulles, where the carrier started service in October, were barely half full during the first two months of the year." The airline had similar figures for Philadelphia, where planes were "just more than half full" and at Denver, where its 66% rate was still "far short" of other carriers at DIA.
McAdoo says that because Southwest has enjoyed 34 straight profitable years investors are perhaps “lulled†into thinking management has the company in good hands. It has also distracted them from the dark numbers coming from the large markets like Chicago, Los Angeles, and Philadelphia. For example, the firm's Chicago to Los Angles lost $2 million in the last quarter, with seven daily roundtrips per day. In 2004 the firm had four round trips a day for that route, but still lost from $1 million to $2 million per-quarter.
- Thread Starter
- #9
Southwest undercut other airlines. New employees and low labor costs, fuel futures and lack of frills allowed them to have a footing in this industry. The other airlines have since adjusted to this scheme, now Southwest will have to cut labor and costs or die. They can do it now and survive or wait for Virgin competition to bury them. I am just the messenger.
ngneer
Advanced
- Aug 20, 2002
- 244
- 0
I don't know how accurate those load factor numbers are, but for argument's sake let's assume they're fairly good. What does that say about WN's profitability? Since there are no numbers provided about fares paid we just don't know. You can fill up a plane with cheap fares and lose money, so load factor by itself is not indicative of profit/loss.
One bright spot for WN is that UA is cutting back it's domestic flying so that will help a bit, especially in Denver.
Denver Post article: UA cuts domestic flying 2-3%
One bright spot for WN is that UA is cutting back it's domestic flying so that will help a bit, especially in Denver.
Denver Post article: UA cuts domestic flying 2-3%
Is that like THIS-----> running it's course, where YOU enter a market, FLOOD IT with frequency and charge UNREALISTIC low fares? To chase your competition off the route? That free market?
Yet as this article shows, according to DOT numbers, PHL is barely running a 50% Load Factor for WN. Another article says that something like 65 out of the last 71 markets WN entered were unprofitable.
Tick, tock. Keep flying those unprofitable flights as your fuel hedges DIMINISH. That high frequency thing is gonna hurt when your hedges diminish more each year.
Is that like THIS-----> running it's course, where YOU enter a market, FLOOD IT with frequency and charge UNREALISTIC low fares? To chase your competition off the route? That free market?
Yet as this article shows, according to DOT numbers, PHL is barely running a 50% Load Factor for WN. Another article says that something like 65 out of the last 71 markets WN entered were unprofitable.
Tick, tock. Keep flying those unprofitable flights as your fuel hedges DIMINISH. That high frequency thing is gonna hurt when your hedges diminish more each year.
The article is full of mistakes, and the bolded portion is a major one. As BoeingBoy and I point out in the link below, the actual Feb WN load factor from PHL was 58.43%, not "barely 50%" and was only 8.4 points below its systemwide load factor for that month.
Here's the link: http://www.usaviation.com/forums/index.php?showtopic=35757
You work in the industry, right?; surely you're not so gullible as to equate low load factors with losses, and higher load factors with profits, are you?
Face it - you were had by reporter for the Washington Post who probably can't tell a 737 from a 747. I can see the Beltway Liberals who probably equate Southwest with Wal-Mart swallowing this nonsense hook, line and sinker, but an airline employee?
KCFlyer
Veteran
How many creditors and shareholders has Southwest screwed in this process? How many bankruptcies does it take to finally 'become competitive' before you'd consider them to be "too many"? Your "savior" airline went the bankruptcy route...and your airline went that way twice in as many years....how badly did YOUR airline hurt the Deltas and Northwests' in the industry by hiding behind bankruptcy "protection"?
Long live SWA and AA.
Delta?....one of the reasons it had to enter bankruptcy was because it tried to put US out of business. One of their FAILED business plans!
You work in the industry, right?; surely you're not so gullible as to equate low load factors with losses, and higher load factors with profits, are you?
its about YIELD.........however, what's surprising is that FACT that load factors are weak. An airline that supposely charges LOW fares, just isnt filling it's planes up.
KCFlyer
Veteran
Would that have been before or after U's first or second bankruptcy? Because at that same time, while U was demanding that employees give back...while they were screwing a second round of creditors and shareholders in bankruptcy court...they were also offering a whole bunch of loss leader fares to "keep the load factors up". You don't think that hurt a healthier Delta or Northwest?
Look again kemosabe....LUV's systemwide load factors have historically been lower than the other majors...have been that way for YEARS. LUV flies with a systemwide load factor in the low to mid 70's and makes a profit because they have MORE folks paying "full fare" than any other airline. The fact that their highest fare is considerably less that what US might have charged is what makes them "low fare"...not the $99 transcon roundtrips offered by the other guys. Nor do they have many seats sold at a great loss to the Pricelines and Hotwires in order to put "butts in seats". So yeah...it's quite possible to have a 50% full flight make a profit....you know...for a while there US was flying planes over 80% full...and losing enough money to have to march back into bankruptcy court for another go round of "restructuring".its about YIELD.........however, what's surprising is that FACT that load factors are weak. An airline that supposely charges LOW fares, just isnt filling it's planes up.
Similar threads
